IMF Approves US $ 76 Million Disbursement Under Burundi Rapid Credit Facility to Address Covid Pandemic
Washington, DC: The Executive Board of the International Monetary Fund (IMF) approved a disbursement of SDR 53.9 million (35% of quota, or approximately $ 76.2 million) under the Facility fast credit (FCR). This emergency financial assistance will support the implementation of Burundi’s COVID-19 response plan and will help finance the country’s urgent balance of payments and budgetary needs resulting from the pandemic.
The COVID-19 pandemic and the resulting border closures have resulted in a sharp economic slowdown, especially in services. Real GDP is estimated to contract by 1% in 2020 and growth is expected to remain subdued in 2021. The pandemic has put Burundi’s fragile health system under pressure and the economic slowdown threatens to lower living standards. and undo recent hard-won improvements.
Authorities have prepared a COVID-19 response plan to limit the spread of the disease and mitigate the macroeconomic and social impacts of the pandemic. Disbursement under the CCR will support the response to COVID-19 and should help catalyze donor support. The authorities are committed to pursuing appropriate economic and financial policies to deal with the impact of the pandemic. They also pledged to prepare and publish audited reports on COVID-19 related spending and to collect information on the ultimate beneficial ownership of companies that have been awarded COVID-19 related contracts.
At the end of the Board’s discussions, Mr. Mitsuhiro Furusawa, Deputy CEO and Interim President, made the following statement:
“The COVID-19 pandemic and associated border closures have resulted in an economic slowdown and created urgent balance of payments and fiscal needs. Authorities have prepared a COVID-19 response plan to limit the spread of the virus, mitigate its macroeconomic impact and support the vulnerable population.
“IMF emergency assistance under the Rapid Credit Facility would help support the response plan, replenish reserves and catalyze donor support. New engagement with the IMF and the wider international community would help close remaining financing gaps and support reforms and longer-term goals.
“It is important to ensure strong transparency and governance of spending related to COVID-19. Measures to strengthen domestic revenue mobilization would help create fiscal space for priority spending and preserve debt sustainability. Donor support in the form of grants and concessional financing remains essential.
“Accommodating monetary and regulatory policies help support the economy. The authorities provided liquidity to the financial sector and continued to monitor vulnerabilities in the financial sector. They are ready to recalibrate policies based on macroeconomic and financial sector conditions. The authorities have committed to undergo a safeguards assessment.
“Strengthening external sustainability is an important political priority. This requires a multi-pronged policy package focused on improving the management of exchange rates and mitigating distortions in the foreign exchange market. “